Stellantis NV (STLA, Financial), the world's fourth-largest automaker, is grappling with a significant stock price decline, down nearly 45% this year. This downturn was exacerbated by a profit warning in late September, unsettling investors. CEO Carlos Tavares, who successfully led the merger of Peugeot and Fiat Chrysler to form Stellantis, plans to retire in 2026. Despite this, Tavares continues to actively engage in resolving the company's challenges, as highlighted by his participation in the Paris Auto Show.
Stellantis has been criticized for operational missteps in the US, particularly related to high pricing and slow response to competitive discount models. Analysts report that many vehicles, such as the Ram 1500 pickup and Jeep Wagoneer, remain unsold at dealerships due to these pricing issues. The company's insistence on maintaining high prices longer than competitors has resulted in widespread inventory problems, according to Cox Automotive analyst Erin Keating.
Dealers have expressed dissatisfaction with Stellantis abandoning entry-level models and underinvesting in popular ones, allowing competitors like Ford (F) and General Motors (GM) to overhaul their product lines and gain market share. Ford's Bronco SUV, for instance, has eaten into Jeep's market. Additionally, the focus on short-term profits has adversely affected the Jeep, Dodge, Ram, and Chrysler brands, as noted by dealers and industry analysts.
The situation has led to strained relations with the United Auto Workers (UAW), which has threatened strikes due to delayed investments, prompting Stellantis to consider legal action. Experts suggest that the automaker must reassess the necessity of maintaining four distinct US brands and seek leadership familiar with the North American market.
Stellantis attempted aggressive incentives for its US lineup, yet third-quarter sales in America fell by 20%. Although it offered substantial cash back on models like the Ram 1500, inventory levels remain high, necessitating potential production cuts to normalize dealership stock. Analysts believe that short-term production adjustments could restore inventory balance, but long-term strategic issues related to brand and model proliferation persist.
